Determinants of Current Account Imbalances in 16 OECD Countries: An Out-Of-Sample Perspective

Herwartz, Helmut; Siedenburg, Florian

doi:10.1007/s10290-007-0111-2

Cited by 12 publications

(7 citation statements)

References 28 publications

(30 reference statements)

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“…On the other hand, Calderon, Chong, and Loayza 4 See Brook et al 2004;Barnett and Straub 2008;Liang 2012;Kandil and Greene 2002;Edwards 2005;Bems, Dedola, and Smets 2007;Fratzscher, Juvenal, and Sarno 2007. 5 See Khan and Knight 1983;Debelle and Faruqee 1996;Elliot and Fatas 1996;Milesi-Ferretti and Razin 1998;Calderon et al 2002;Giuliodori 2004;Chinn and Prasad 2003;Herwartz and Siedenburg 2007;Ang and Sek 2011. Downloaded by [University of Otago] at 22:32 15 March 2015 investigated the link between a broad set of economic variables and current account deficits in forty-four developing countries for the period of 1966-94 by using panel data analysis. The results point out that increases in domestic output growth, movements in the terms of trade, and rising real exchange rates will lead to higher current account deficits.…”

Section: Literature Surveymentioning

confidence: 98%

Identification of Current Account Deficit: The Case of Turkey

Dinçer¹,

Yasar

2014

The International Trade Journal

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Turkey is a developing, small, open economy with a volatile growth pattern. One of the major problems of its economy is the current account deficit (CAD) problem. Analyzing the current account deficit, one faces more than one transmission channel: (i) credit growth would increase GDP growth and the CAD; (ii) increases in growth would cause real exchange rate appreciation, thereby increasing imports and the CAD; and (iii) increases in capital inflows would result in exchange rate appreciation, which would stimulate imports and discourage exports, increasing the CAD. This article analyzes these transmission mechanisms to CAD by using a vector autoregression (VAR) methodology for the period 1987Q1 to 2011Q4.

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Section: Literature Surveymentioning

confidence: 98%

Identification of Current Account Deficit: The Case of Turkey

Dinçer¹,

Yasar

2014

The International Trade Journal

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“…In addition, some critical test results were found by the authors, indicating that none of these two theories were valid. Herwartz & Siedenburg (2007) tested the data of 16 OECD countries in the period 1980-2004 with panel regression and dynamic panel method. According to the findings, the effects of the variables of public sector budget balance, national output deficit and terms of trade on the current account balance are essential.…”

Section: (X − M) = (Y − C − T) + (T − G) − I = Sp + Sg -Imentioning

confidence: 99%

Analysis of Twin Deficit Problem and Feldstein-Horioka Hypothesis: An Empirical Investigation for Oecd Countries

Alakbarov

Şaşmaz

2020

International Journal of Management Economics and Business

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Panel Nedensellik Testi kullanılarak analiz edilmiştir. Eşbütünleşme ve nedensellik analizi sonuçlarına göre bütçe açıkları ile cari işlemler açıkları arasında uzun vadeli bir ilişki olduğu görülmektedir. Bu sonuç Geleneksel Keynesyen Yaklaşımı desteklemektedir. Ayrıca, bütçe açıkları ile cari işlemler açıkları arasında iki taraflı bir ilişki olduğu görülmektedir. AMG testi ile uzun dönem katsayıları elde edilmiş ve panel katsayı sonuçları dikkate alındığında, ikiz açık hipotezinin geçerli olduğu görülmüştür. Ancak, ayrı ayrılıkta ülkeler incelendiğinde, bazı ülkeler için ikiz açık hipotezinin, bazı ülkeler için ise ikiz ayrışma hipotezinin geçerli olduğu görülmektedir. Bunun yanı sıra çalışma sonuçları ile Feldstein-Horioka (1980) tarafından ifade edilen sonuçların desteklenmediği görülmektedir.

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“…Their empirical findings revealed that a negative relationship exists between the movements of the real effective exchange rate and current account in majority of EMU countries after accounting for the role of the income growth. Herwartz and Siedenburg (2007), on the other hand, based their study on Debelle and Faruqee (1996) to uncover the determinants of current account imbalances. Since fixed effect evaluation of current account determinants may suffer from slope heterogeneity, they employed mean group estimation for a panel of 16 OECD countries covering the period 1980–2004.…”

Section: Literature Reviewmentioning

confidence: 99%

Current account deficit across South Asia: A Second Generation Methodological Adaptive Approach

Shah¹

2020

J Public Affairs

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Current account deficit poses a serious threat for a country's macroeconomic stability despite the fast economic growth. The primary objective of this paper is to explain and critically examine the determinants of current account deficit across seven South Asian countries using yearly data for 1980–2016 period. This paper employed several econometric techniques such as cross‐sectional dependence to see if shocks that occur in one country affect another, panel unit root test to check the stationary of the data and Panel cointegration test to check long‐run relationship among the variables. This study also implemented Continuously Updated estimation procedure given to estimate long‐run coefficients. The findings suggest that an appreciation of real effective exchange rate leads to a reduction in current account deficit, contrary to popular belief. The analysis also reveals that financial development, trade openness, fiscal balance and population growth have positive and significant relationship with current account deficit in South Asia but net foreign asset negatively affects current account deficit. This study, therefore, has several policy implications for South Asian countries.

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Determinants of Current Account Imbalances in 16 OECD Countries: An Out-Of-Sample Perspective

Abstract: Current account dynamics, panel data models, heterogeneity, prediction,

Cited by 12 publications

References 28 publications

Identification of Current Account Deficit: The Case of Turkey

Identification of Current Account Deficit: The Case of Turkey

Analysis of Twin Deficit Problem and Feldstein-Horioka Hypothesis: An Empirical Investigation for Oecd Countries

Current account deficit across South Asia: A Second Generation Methodological Adaptive Approach

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